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Waist Deep in Big Oil

Waist Deep in Big Oil

While political pressure is mounting for a pullout from Iraq, the
subject of total withdrawal remains unbroachable within the
political establishment. Control of the Iraq's oil reserves, from the
beginning, was the Bush Administration's real reason for this war.

November 23, 2005

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The mid-November revelation in the Washington Post that as early as February 2001 senior executives of at least four of the country’s biggest oil companies met with aides to Vice President Cheney has reopened the debate over Big Oil’s influence on the Bush Administration’s energy policy. The immediate controversy concerns whether executives of ExxonMobil, Conoco, Shell and BP America misled the Senate Energy and Commerce committees when they denied knowledge of the meetings in testimony on November 9. The leaked documents confirm that these meetings in fact took place, but because Republican chair Ted Stevens declined to oblige the executives to testify under oath–which committee Democrats strongly protested at the time–they cannot be charged with perjury. (They could, however, be charged with making false or fraudulent statements to Congress.)

The executives’ evasive answers have renewed questions about the functioning of the secretive White House Energy Task Force, especially its unwillingness to draft policies that transcend the interests of Big Oil. The focus on industry profits and prevarication, although it’s important, misses a much more important reason for the Bush Administration’s desperate attempts to keep documents related to the task force secret. In a word: Iraq.

While Iraq was absent from the oil executives’ November 9 testimony, it is clear that the country and its immense petroleum reserves were on the minds of the Administration and its industry friends from the moment Bush assumed office, and for good reason: With Americans consuming one-quarter of the world’s daily petroleum production of 84 million barrels, scientists and industry leaders were by 2001 increasingly considering the possibility that the “age of peak oil production” was approaching much sooner than had previously been acknowledged.

Once peak oil is reached, it will no longer be possible to extract enough oil from the earth to replace what we consume, thereby setting off a potentially explosive competition for the world’s remaining supplies. In such a scenario, insuring American access to, and where possible leverage or even control over, the world’s major oil deposits would be a natural concern for an Administration umbilically tied to Big Oil, particularly in the context of escalating competition with an aggressive, energy-hungry China.

The belief in peak oil, while not universally shared, has had increasing scientific support in recent years. And it is reflected in the November 9 testimony of Chevron chair David O’Reilly, who explained that in the context of “growing demand for energy, particularly in Asia…oil production in mature basins, particularly in Europe and North America, has been declining…. Meanwhile, OPEC production has increased, but is now approaching its current capacity to deliver.” Yet Iraq has, in addition to its proven reserves–second only to Saudi Arabia’s–vast untapped fields that remain, in the words of one industry analyst, “virgin territory.”

In this context, the few documents that have been made public from the Energy Task Force (thanks to the conservative watchdog Judicial Watch) reveal not only that industry executives met with Cheney’s staff but that a map of Iraq and an accompanying list of “Iraq oil foreign suitors” were the center of discussion. The map erased all features of the country save the location of its main oil deposits, divided into nine exploration blocks. The accompanying list of suitors revealed that dozens of companies from thirty countries–but not the United States–were either in discussions over or in direct negotiations for rights to some of the best remaining oilfields on earth.

It’s not hard to surmise how the participants in these meetings felt about this situation. As Deutsche Bank explained in a 2002 report titled “Baghdad Bazaar: Big Oil in Iraq,” with upward of $38 billion in projects already agreed to by the Iraqi government, the major US companies would lose if Saddam made a deal with the UN, whereas the Europeans, Russians and Chinese would come out ahead. In a post-Saddam Iraq, however, the US oil majors–specifically, according to the report, ExxonMobil and ChevronTexaco–could manage the country’s resources. No wonder the executives of those companies denied meeting with Cheney’s staff only weeks after George W. Bush’s inauguration–and fully half a year before September 11 and the subsequent concrete planning of the Iraq War.

The centrality of Iraq to the task force meetings requires us to reconsider the calculus used by senior Bush Administration planners in judging the risks and benefits of invading and occupying Iraq, and its resulting definitions of success. The thinking they reveal suggests that neither democracy nor a reduction of violence in the country, however desirable in theory, is necessary to achieve core US objectives.

Instead, insuring a long-term US military presence in Iraq and a significant (if behind-the-scenes) role in managing and developing its petroleum sector together constitute a prize of immense economic and geostrategic value for the Administration and its corporate sponsors. In fact, at the very moment the first Energy Task Force meetings with industry officials were held, in February 2001, the National Security Council issued a directive for staff to cooperate with the task force in the “melding” of new “operational policies towards rogue states” with “actions regarding the capture of new and existing oil and gas fields.” No place on earth was more amenable to such melding than Iraq.

From this perspective, it is possible to argue that despite great human and financial costs, the United States–or rather the oil, arms and related industries, if not US citizens–may still “win” a war for which planning could well have commenced as early as the first weeks of the Bush Administration. While increasing numbers of politicians and pundits are calling for troop withdrawals, the subject of a total US withdrawal remains largely unbroachable within the political establishment. Senator Joseph Biden put it succinctly when–after the furor over John Murtha’s courageous demands for a pullout–he warned that if the United States brings the troops home, nothing will protect “our core interests,” which, tellingly, he did not define. For their part, Iraqis have been so overwhelmed by the daily grind of violence and failed reconstruction efforts, they were unable to challenge Washington by including in the recently approved Constitution provisions prohibiting foreign military bases or foreign management of the oil industry–two crucial markers of genuine sovereignty.

“Maybe after the next election,” one senior Iraqi government adviser explained to me. Perhaps; but if the United States can manage the chaos and violence in Iraq in a manner that avoids a significant escalation of US casualties while making it too dangerous for Iraq’s elected government to “ask us to leave” anytime soon, the sponsors of Operation Iraqi Freedom can look forward to a happy retirement indeed.

Mark LeVineMark LeVine is a professor of history at the University of California, Irvine and Distinguished Visiting Professor at Lund University's Center for Middle Eastern Studies in Sweden. His most recent book, with ambassador Mathias Mossberg, is One Land, Two States: Israel and Palestine as Parallel States (UC Press, 2014).